UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC  20549
                          FORM 10-K
    [X]  Annual Report Pursuant to Section 13 or 15(d) of the
                  Securities Exchange Act of 1934
             For the Fiscal Year Ended December 31, 1996
  [  ]  Transition Report Pursuant to Section 13 or 15(a) of the
                  Securities Exchange Act of 1934

                  Commission File Number 0-13559

                           LDP-III
        (Exact name of registrant as specified in its charter)

        California                                 94-2911983
(State or other jurisdiction of                 (I.R.S. Employer
incorporation or organization)               Identification Number)

               P. O. Box 130, Carbondale, CO 81623
            (Address of principal executive offices)

                      (970) 963-8007
      (Partnership's telephone number, including area Code)

    Securities registered pursuant to Section 12(b) of the Act:

                             None

     Securities registered pursuant to Section 12(g) of the Act:

              Units of Limited Partnership Interest
                      (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act 
of 1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.  

                  Yes [ X ]      No [   ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 
of Regulation S-K (229.405 of this chapter) is not contained herein, and will 
not be contained, to the best of registrant's knowledge in definitive proxy or 
information statements incorporated by reference in Part III of this Form 10-
K or any amendment to this Form 10-K   [    ].

State the aggregate market value of the voting stock held by non-affiliates 
of the registrant.  Inapplicable

DOCUMENTS INCORPORATED BY REFERENCE.  None
1. 
<PAGE>

LDP-III

FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 1996

TABLE OF CONTENTS
Form 10-K

Item No.    Name of Item                                       

Part I
 Item 1.     Business
 Item 2.     Properties
 Item 3.     Legal Proceedings
 Item 4.     Submission of Matters to a Vote of Security 
                  Holders

Part II
 Item 5.     Market for Partnership's Common Equity and 
                  Related Partnership Matters
 Item 6.     Selected Financial Data
 Item 7.     Management's Discussion and Analysis of
             Financial Condition and Results of Operations
 Item 8.     Financial Statements and Supplementary Data
 Item 9.     Changes in and Disagreements With Accountants
                  on Accounting and Financial Disclosure

Part III
 Item 10.    Directors and Executive Officers of the 
                  Partnership
 Item 11.    Executive Compensation
 Item 12.    Security Ownership of Certain Beneficial 
                  Owners and Management
 Item 13.    Certain Relationships and Related Transactions

Part IV
 Item 14.    Exhibits, Financial Statement Schedules and Reports
                  on Form 8-K

Signatures

Index to Financial Statements and Supplemental
Financial Statement Schedules

<PAGE>

PART I

ITEM 1.  BUSINESS

LDP-III (the "Partnership") is a limited partnership which was organized 
under the Uniform Limited Partnership Act of the State of California on 
August 30, 1983.  The Partnership was organized as a non-specified 
property limited partnership to acquire a diversified portfolio of real 
properties, including commercial, residential and agricultural properties, 
located primarily within the western portion of the United States.  The 
General Partner of the Partnership is Landsing Partners-III (the "General 
Partner") , a partnership having two General Partners, Landsing Equities 
Corporation, a California corporation which is the managing partner of the 
General Partner, and Partners '84, a California limited partnership.

The Partnership's business consists of a single segment - equity 
investments in leveraged income-producing real property.  For a schedule 
of the Partnership's revenue, net loss and total assets for its last fiscal 
year, see Item 6, Selected Financial Data, below.  The Partnership will not 
be engaged in the production of goods or the rendering of services.

The Partnership had an investment in a wholly-owned subsidiary, LDP-III 
Realty Service Corporation, which owned one property, the 391 Forbes 
Building in South San Francisco, California, until it was sold in August, 
1996.  For financial reporting purposes, the Partnership's investment in 
LDP-III Realty Service Corporation was presented on a consolidated basis.

The Partnership requires cash reserves to finance property operations.  
Cash reserves totaled $383,000 at December 31, 1996.  Funds not invested 
in real property are placed in temporary high-grade investments which can 
be readily liquidated.

Results of the Partnership's operations depend primarily upon the 
successful operation of its existing investments.  The yields (return on 
capital) available on equity ownership of investments in income-producing 
and other types of real estate investments depend to a large extent upon the 
ability to lease or rent the property, the geographic location of the 
property, competition and other factors, none of which can be predicted 
with any certainty.  See Item 7, Management's Discussion and Analysis of 
Financial Condition and Results of Operations, for a more specific 
discussion of the impact of the foregoing factors on the Partnership's 
financial condition, operations and liquidity.

The Partnership has not engaged in research activities relating to the 
development or improvement of products or services.  The Partnership has 
not made, nor does it anticipate making, during the remainder of its current 
fiscal year or during its succeeding fiscal year, any capital expenditures for 
environmental control facilities, nor does it expect any material effects 
upon capital expenditures, earnings or competitive position resulting from 
compliance with present Federal, state or local environmental control 
provisions.  The Partnership has no employees.  All of the Partnership's 
operations are located in the United States.

The Partnership is currently in the process of selling its properties.  One 
property was sold in 1996.  One property, the 1201 Cadillac property, has 
been listed for sale.  The other property, Jefferson Office Building, will be 
placed on the market in 1998.  

<PAGE>
<TABLE>

ITEM 2.  PROPERTIES

A description of the income-producing properties which the Partnership 
owned at December 31, 1996 is as follows:
<CAPTION>
                                               Financial
                                               Occupancy   Physical   Average
                                     Net       For The     Occupancy  Effective
                                     Rentable  Year Ended  At         Rental
Name & Location      Type            Sq. Ft.   12/31/96    12/31/96   Rate
                                                  <F1>      <F2>      <F3>
<S>                  <C>             <C>          <C>       <C>       <C>

Jefferson Place      Office Building 54,344        94%       89%      $11.35
Boise, Idaho

1201 Cadillac Court  Industrial      51,450       100%      100%      $ 8.92
Milpitas, California

<FN>
<F1>
Expressed as a percentage, it compares the actual dollar amount of 
rent received with the dollar amount of rent which would be received 
if the property were fully leased.

<F2>
Physical occupancy denotes the percentage of net rentable square 
footage leased as of a certain date.

<F3>
Represents the average effective rental rates, per square foot, for the 
year ended December 31, 1996.

</TABLE>

Each of the Partnership's properties is subject to substantial encumbrances.  
Reference is made to Schedule XI to the Financial Statements filed as part 
of this annual report for information regarding such encumbrances.

ITEM 3.  LEGAL PROCEEDINGS

None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matter has been submitted to a vote of security holders, through 
solicitation of proxies or otherwise, during fourth quarter 1996.

<PAGE>
<TABLE>

PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY 
         AND RELATED PARTNERSHIP MATTERS

There is no established public trading market for the Units of Limited 
Partnership interest of the Partnership and there are substantial restrictions 
on the transferability of such Units imposed by Federal and state securities 
laws and by the Limited Partnership Agreement, as amended.

The approximate number of record holders of Units of the Partnership as 
of January 1, 1997, is 4,070.

The limited partners of the Partnership (the "Limited Partners") are entitled 
to certain distributions under the Amended and Restated Certificate and 
Agreement of Limited Partnership of the Partnership.  

ITEM 6.  SELECTED FINANCIAL DATA <F1>
<CAPTION>

                            (In thousands, except per Unit amounts)

                    .............For the years ended December 31...........
                        1996      1995       1994      1993       1992
<S>                  <C>       <C>        <C>       <C>        <C>

Rental Revenue       $ 1,210   $ 1,339    $ 2,101   $ 2,934    $ 2,907
Agricultural Revenue       0         0          0       369      1,599
Net Loss                (193)     (334)      (259)     (173)    (1,108)
Net Loss Per Unit<F2>     (5)       (9)        (7)       (5)       (30)
Total Assets           6,954     8,636      9,286    17,451     23,280
Long-term Obligations  6,891     7,871      8,167    15,218     20,201
Cash Distributions
  Per Unit                15         0         14         0          0
__________
<FN>
<F1>
Financial data of the Partnership for 1996 is not comparable to that of 
1995, 1994 or prior periods because the Partnership did not own the 
same number of properties throughout these periods.  For a more 
specific discussion of the impact of the foregoing factor on the 
comparability of the Partnership's financial information, see Item 7, 
Management's Discussion and Analysis of Financial Condition and 
Results of Operations.

<F2>
Based on a weighted average of outstanding Units in 1996, 1995, 
1994, 1993 and 1992. 

</TABLE>
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS

INTRODUCTION

LDP-III is a California limited partnership formed in August 1983.  The 
Partnership's business consists of a single segment  - equity investments in 
leveraged income-producing real estate.

The Partnership's current portfolio consists of fee title ownership of two 
properties located in two geographic areas.  The Partnership's property 
investments are: Jefferson Place Office Building, Boise, Idaho, and 1201 
Cadillac Court Building, Milpitas, California.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 1996 the Partnership had cash and short-term 
investments totaling approximately $383,000.  Cash reserves not needed 
for current operations are placed in temporary, high-grade investments 
which can be readily liquidated.

During 1994, the Partnership sold the Silverado Apartments and the 
Montbello Green Business Park.  Gross proceeds were $8,500,000 for 
Silverado Apartments and $260,000 for Montbello Green Business Park, 
resulting in a gain of $364,000 and $37,000, respectively.  Cash proceeds 
from these two sales totaled $1,463,000 which was used to fund a Partner 
Distribution, Capital Expenditures and Partnership Operations.

In August 1996, the Partnership sold its interest in the 391 Forbes Building 
in South San Francisco, California.  Gross proceeds were $1,730,000, 
which resulted in a gain of $223,000 and cash proceeds of $660,000.  
Proceeds were used to fund a Partnership distribution.

The Partnership has invested $298,000 in short-term federally insured 
certificates of deposit which mature on a date in excess of 90 days or 3 
months from the date of purchase.  Due to this characteristic, these 
deposits are classified as "short-term investments" rather than as "cash and 
cash equivalents."

During 1996, the Partnership experienced a net decrease in cash and short-
term investments of $27,000.  Sources of cash during the year were from 
regular Partnership Operations and the sale of 391 Forbes.  Cash uses 
during 1996 were:  $51,000 for property capital expenditures and 
construction, $45,000 for principal payments on notes payable, and 
$556,000 for Partnership distribution.  As of December 31, 1996, cash plus 
short-term investments totaled $383,000 versus a balance of $410,000 at 
December 31, 1995.

The Partnership's most significant current uses of cash reserves are for 
principal payments on outstanding debt balance and capital expenditures 
needed to maintain properties and current occupancy rates.  

In prior years, the Boise and San Francisco Bay Area marketplaces, where 
certain of the Partnership's real estate assets are located experienced a 
significant imbalance between supply and demand.  Historic high building 
activity and declining economic conditions in these markets produced high 
vacancies in industrial and commercial properties.  As a result, market rate 
rents declined.  Due to these conditions the Partnership suffered recurring 
losses and negative cash flows from operations.  Market conditions have 
improved in 1996 and are expected to continue to improve in 1997.

The Partnership made a cash distribution to its limited partners of $15.00 
per unit during 1996.  All future sale proceeds will be used to increase 
reserves, reduce indebtedness and/or make distributions to investors.  

The Partnership is currently in the process of selling its properties.  One 
property was sold in 1996.  One property, the 1201 Cadillac property, has 
been listed for sale.  The other property, the Jefferson Place Office 
Building, will be placed on the market in 1998.  Management believes that 
the cash reserves plus proceeds from operations and property sales will be 
sufficient to meet the viable operating costs of the partnership as it 
continues through this liquidation phase.

<PAGE>

RESULTS OF OPERATIONS

Overall, rental income decreased 9% in 1996 versus 1995.  1995's revenue 
decreased 41% from the 1994 level.  The 1996 decrease was due to the 
sale of 391 Forbes in August 1996.  The 1995 decrease was primarily due 
to selling the Silverado Apartment complex, in July 1994.  

Interest income in 1996 decreased 22% from that in 1995.  This was the 
result of lower average cash balances held by the Partnership.  Revenues 
for the two properties owned continuously for the three year period 
increased 3% from 1995 to 1996, and 8% from 1994 to 1995.

Overall, operating expenses on rental properties increased 19% in 1996 
versus 1995, or $78,000.  In 1995, operating expenses decreased 61% 
versus 1994.  The 1996 increase was caused by an increase in maintenance 
expenses, property taxes and other miscellaneous expenses.

Interest expense decreased 76% in 1996 versus 1995.  The decrease was 
caused by the reduced amount of property indebtedness due to the 
disposition of properties in 1996.  Interest expense in 1995 decreased 45% 
versus 1994.  This decrease was also the result of disposition of properties.  
The partnership indebtedness is currently all at fixed rates.  Thus, the 
partnership will not be impacted by the current changes in the interest rate 
environment.  Depreciation and amortization expense decreased 17% and 
33% from 1995 to 1996, and 1994 to 1995 respectively.  The decrease in 
depreciation expense was due to the disposition of properties during this 
period of time.

General and administrative expenses decreased 7% in 1996 versus 1995.  
1995's general and administrative expenses decreased 17% from 1994.  
The decrease in 1996 was due to management's continuing efforts to keep 
general and administrative expense under control.  The General Partner 
expects costs to stabilize during 1997 relative to 1996.  

Net loss of the Partnership before gain from sale of real estate or ordinary 
expenses increased 24% in 1996 versus 1995.  This increase is primarily 
the result of increased operating expenses.    Loss of the Partnership in 
1995 decreased 67% versus 1994.  This decrease was primarily the result 
of disposition of properties which were operating at a net loss, and 
improvement in property operations of the properties which continue to be 
held by the Partnership.

The result of operations for 1996 are not comparable to 1995 or 1994.  
Variables between the years due to the number of properties operated and 
the number of properties sold, can make comparison of operating results 
misleading.  Comparison of the operations of the two properties operated 
continuously through 1996, 1995 and 1994 is provided below:

<PAGE>
<TABLE>
<CAPTION>
                                  1996       1995       1994
<S>                            <C>        <C>        <C>
Rental Revenue                 $ 1,076    $ 1,095    $ 1,100 
Rental Operating Expense           436        344        436
Net Operating Income           $   640    $   751    $   664
  
Interest Expense               $   608    $   611    $   917

</TABLE>

Rental revenues from 1994 to 1995 decreased by less than 1%.  Rental 
Revenues decreased 1% for 1996 compared to 1995.

Rental operating expense on continuously owned properties increased
26% from 1995 to 1996 due to higher maintenance and upkeep at Jefferson
Place and higher property taxes at 1201 Cadillac Court.  Operating
expense decreased 9% from 1994 to 1995.  This decrease was the result
Of decreases in insurance costs and general and administrative expenses.

INFLATION

The Partnership's rental revenues in the overbuilt real estate markets of 
Boise and San Francisco, have not followed the overall inflationary trends 
of the economy.  In the future, the General Partner believes market rate 
rents in those areas will more closely follow or exceed inflation.  
Operating costs for properties in most  of the Partnership's markets have 
continued to follow inflationary trends.  It is not expected that the 
Partnership will be materially impacted by inflationary forces in the near 
term.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this Item is contained at Page F-1 following 
in this Report.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE

None.

<PAGE>

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The General Partner of the Partnership is Landsing Partners-III, which has 
sole responsibility for all aspects of the Partnership's operations.  It is a 
General Partnership having two General Partners, Landsing Equities 
Corporation, a California corporation, which is the managing General 
Partner of the General Partner, and Partners '84, a California limited 
partnership.  The organizers or promoters of the Partnership are Landsing 
Equities Corporation and Gary K. Barr.  Landsing Equities Corporation 
and Mr. Barr are the General Partners of Partners '84.  Mr. Barr holds the 
position with Landsing Equities Corporation indicated below.

Gary K. Barr is the Director and President of Landsing Equities 
Corporation.  His principal occupation during the last five years or more, 
and certain other affiliations are set forth below:

Gary K. Barr.  Mr. Barr serves as Chairman and Chief Executive Officer 
of Pacific Coast Capital and has served as President and Director of 
Landsing Pacific Fund from its inception in November, 1988 to July, 1992.  
Mr. Barr received a Bachelor of Science degree in Mechanical Engineering 
from Oklahoma State University in 1967 and a Master of Business 
Administration degree from the Stanford University Graduate School of 
Business in 1972.  Mr. Barr serves on the Board of Governors of the 
National Association of Real Estate Investment Trusts and on its Editorial 
Board.  Mr. Barr has served as President of the California Chapter of the 
Real Estate Securities and Syndication Institute of the National Association 
of Realtors ("RESSI"), which has awarded him the designation of 
Specialist in Real Estate Securities.  Since 1983, he has served on the 
Board of Directors of Silicon Valley Bancshares.  In 1989 he authored the 
book J.K. Lasser's "Real Estate Investment Guide" published by Prentice 
Hall.  

ITEM 11.  EXECUTIVE COMPENSATION

The General Partner, Landsing Partners-III, and its General Partners, 
receive no compensation from the Partnership.  The General Partner has 
contracted with The Landsing Corporation, an affiliate, for the provision of 
certain asset and property management and administrative services.  The 
Landsing Corporation has subcontracted these management and 
administrative services to its affiliate, Pacific Coast Capital.  During 1996, 
Pacific Coast Capital received management fees of $132,000, which were 
determined based on expenses incurred in order to operate the Partnership.  
In addition, Pacific Coast Capital was paid $32,000 for property 
management services.  These property management fees were based on 
monthly property revenues received.  See Item 13, "Certain Relationships 
and Related Transactions" for further information.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

No person or group is known by the Partnership to hold more than 5% of 
the Units of Limited Partnership.  The General Partner is not a direct or 
beneficial owner of any Units of the limited partnership.  The General 
Partner knows of no arrangements, including any pledge by any person of 
securities of the Partnership, the operation of which may at a subsequent 
date result in a change in control of the Partnership.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Partnership has agreements with The Landsing Corporation and one of 
its affiliates, Pacific Coast Capital, pursuant to which the Partnership has 
paid various fees and compensation to these companies.  The Landsing 
Corporation is a closely-held corporation.

The Partnership has entered into a property management agreement with 
Pacific Coast Capital for the management of the Partnership's properties.  
During 1996, Pacific Coast Capital received $32,000 for property 
management.  

The Partnership has retained The Landsing Corporation to serve as advisor 
and to manage the day-to-day operations of the Partnership.  These 
services are provided under a subcontract with Pacific Coast Capital, an 
affiliate of The Landsing Corporation.  Pacific Coast Capital is to perform 
these services based on reimbursement of costs incurred but in no case are 
these to exceed those which the Partnership would have to pay 
independent parties for comparable services.  During 1996, Pacific Coast 
Capital received expense reimbursements of $132,000.  

For information concerning the agreements between the Partnership and 
the affiliates of The Landsing Corporation, see Note 2 of Notes to 
Consolidated Financial Statements filed as part of this Annual Report.

<PAGE>

PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

  (a) 1. Financial Statements
         See the Index at page F-1.

      2. Financial Statements Schedules
         See the Index at page F-1.

      3. Exhibits

         See the Exhibit Index which immediately precedes the      
         Exhibits filed with this Report.

  (b) The Partnership filed one report on Form 8-K during the quarter 
      ended September 30, 1996, to report the "Disposition of an Asset".    

<PAGE>
                             SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the Partnership has duly caused this Report to be 
signed on its behalf by the undersigned, thereunto duly authorized.

                             LDP-III

                                By: Landsing Partners-III, General Partner

                                    By: Landsing Equities Corporation,
                                        General Partner

 March 31, 1997                          By: /s/ Gary K. Barr 
                                             President and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this 
Report has been signed below by the following persons on behalf of the 
Partnership and in the capacities and on the dates indicated.

March 31, 1997                              /s/ Gary K. Barr   
                                            President and Director,
                                            Landsing Equities Corporation
                                            (Principal Executive Officer)

Supplemental Information to be Furnished With Reports Filed Pursuant to 
Section 15(d) of the Act by Registrants Which Have Not Registered 
Securities Pursuant to Section 12 of the Act.

No Annual Report or Proxy material has been sent to Partnership's security 
holders.  An Annual Report will be furnished to such security holders 
subsequent to the filing of Partnership's Annual Report on Form 10-K, and, 
when sent, Partnership shall furnish copies of such material to the 
Commission.

<PAGE>

LDP-III

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND
SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
INCLUDED IN THE FORM 10-K

DESCRIPTION
Report of Independent Accountants

Financial Statements:

Consolidated Balance Sheets, December 31, 1996 and 1995
Consolidated Statements of Operations for the Years Ended 
  December 31, 1996, 1995 and 1994
Consolidated Statements of Changes in Partners' Equity (Deficit)
  for the Years Ended December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows for the Years Ended 
  December 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements

Supplemental Consolidated Financial Statement Schedules:

Schedule X - Supplementary Consolidated Income Statement Information
  for the Years Ended December 31, 1996, 1995 and 1994
Schedule XI - Real Estate and Accumulated Depreciation
  at December 31, 1996

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the General Partner of LDP-III:

We have audited the accompanying consolidated financial statements and 
consolidated financial statement schedules of LDP-III and subsidiary listed 
in the index on page F-1 of this Form 10-K as of December 31, 1996 and 
1995, and the related consolidated statements of operations, partners' 
equity and cash flows for each of the three years in the period ended 
December 31, 1996.  These financial statements are the responsibility of 
the Partnership's management.  Our responsibility is to express an opinion 
on these financial statements and financial statement schedules based on 
our audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement.  An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial 
statements.  An audit also includes assessing the accounting principles 
used and significant estimates made by management, as well as evaluating 
the overall financial statement presentation.  We believe that our audits 
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the consolidated financial position 
of LDP-III and subsidiary as of December 31, 1996 and 1995, and the 
consolidated results of their operations and their cash flows for each of the 
three years in the period ended December 31, 1996, in conformity with 
generally accepted accounting principles.  In addition, in our opinion, the 
consolidated financial statement schedules referred to above, when 
considered in relation to the basic financial statements taken as a whole, 
present fairly in all material respects, the information required to be 
included therein.

The accompanying consolidated financial statements and consolidated 
financial statement schedules have been prepared assuming that the 
Partnership will continue as a going concern.  As discussed in Note 1 to 
the financial statements, the Partnership has suffered negative cash flows 
and recurring losses from operations which raise substantial doubt about its 
ability to continue as a going concern.  Management's plans in regard to 
this matter are also described in Note 1.  The financial statements do not 
include any adjustments that might result from the outcome of this 
uncertainty.

DALBY, WENDLAND & CO., P.C.

Glenwood Springs, Colorado
March 13, 1997 

<PAGE>
<TABLE>

LDP-III

CONSOLIDATED BALANCE SHEETS, DECEMBER 31, 1996 and 1995
(In thousands)
<CAPTION>
                                                          1996       1995
<S>                                                   <C>        <C>
ASSETS

INVESTMENTS IN REAL ESTATE:
Rental properties (including property held for sale)  $ 10,510   $ 12,306
Accumulated depreciation                                (4,086)    (4,264)
                                                         6,424      8,042

CASH AND CASH EQUIVALENTS (including interest 
 bearing deposits of $85 in 1996 and $104 in 1995,
 and including restricted cash of $37 in 1996
 and $14 in 1995)                                           85        212
OTHER ASSETS:
Short-term investments                                     298        198
Accounts receivable                                         17         24
Prepaid expenses and deposits                                4          8
Loan costs and leasing commissions (net of accumulated
 amortization of $474 in 1996 and $536 in 1995)            126        152
Total other assets                                         445        382

TOTAL                                                  $ 6,954    $ 8,636

LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

LIABILITIES:
Notes payable                                          $ 6,891   $ 7,871 
Accounts payable                                             0         5 
Other liabilities                                          133        81
Total liabilities                                        7,024     7,957

PARTNERS' EQUITY (DEFICIT)                                 (70)      679

TOTAL                                                  $ 6,954   $ 8,636

The accompanying notes are an integral part of the consolidated financial 
statements.

</TABLE>
<PAGE>
<TABLE>
LDP-III

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(In thousands except per unit amounts)
<CAPTION>
                                                1996       1995      1994
<S>                                          <C>        <C>        <C>
REVENUE:
Rental                                       $ 1,210    $ 1,339    $ 2,101 
Interest                                          22         28         30
Total revenue                                  1,232      1,367      2,131

EXPENSE:
Interest                                         671        717      1,302 
Operating                                        472        394      1,002
Depreciation and amortization                    325        396        588 
General and administrative                       180        194        233 
Total expense                                  1,648      1,701      3,125

LOSS BEFORE GAIN FROM SALE OF REAL
 ESTATE AND EXTRAORDINARY ITEM                  (416)      (334)      (994) 
GAIN FROM SALE OF REAL ESTATE                    223          0        401
LOSS BEFORE EXTRAORDINARY ITEM                  (193)      (334)      (593) 
EXTRAORDINARY ITEM - GAIN FROM
 EXTINGUISHMENT OF DEBT                            0          0        334
NET LOSS                                     $  (193)   $  (334)   $  (259)

NET LOSS BEFORE EXTRAORDINARY ITEM PER PARTNERSHIP UNIT:
     LIMITED PARTNERS                             (5)        (9)       (16)
     GENERAL PARTNERS                              0          0          0

EXTRAORDINARY ITEM:
  GAIN FROM EXTINGUISHMENT OF DEBT PER PARTNERSHIP UNIT:
     LIMITED PARTNERS                              0          0          9
     GENERAL PARTNERS                              0          0          0

NET LOSS PER PARTNERSHIP UNIT:
       LIMITED PARTNERS                           (5)        (9)        (7)
       GENERAL PARTNERS                            0          0          0

TOTAL                                             (5)        (9)        (7)

The accompanying notes are an integral part of the consolidated financial 
statements.

</TABLE>
<PAGE>
<TABLE>

LDP-III

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Dollars in thousands except per unit amounts)
<CAPTION>

                         LIMITED PARTNERS 
                            NUMBER OF                 GENERAL      TOTAL
                           PARTNERSHIP                PARTNER    PARTNERS'
                             UNITS          AMOUNT    AMOUNT      EQUITY
                                                                 (DEFICIT)

<S>                          <C>            <C>          <C>       <C>
BALANCE, JANUARY 1, 1994     37,156         1,792        0         1,792
Abandonments                    (15)
Distribution - 1994                          (520)                  (520)
Net loss - 1994                              (259)                  (259)

BALANCE, DECEMBER 31, 1994   37,141         1,013        0         1,013
Abandonments                     (5)
Net loss - 1995                              (334)                  (334)

BALANCE, DECEMBER 31, 1995   37,136           679        0           679
Distribution-1996                            (556)       0          (556)
Net loss - 1996                              (193)       0          (193)

BALANCE, DECEMBER 31, 1996   37,136         $ (70)     $ 0         $ (70)

The accompanying notes are an integral part of the consolidated financial 
statements.   

</TABLE>
<PAGE>
<TABLE>

LDP-III

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(In thousands)
<CAPTION>

                                                    1996       1995      1994
<S>                                              <C>       <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                         $ (193)   $  (334)   $ (259)
Adjustments to reconcile net loss to net cash
 used in operating activities:
Provision for loss in value of investment in real
 estate, gain from sale of real estate and extra-
 ordinary item                                     (223)         0      (699)
Depreciation                                        325        342       588

Changes in operating assets and liabilities:
Decrease in accounts receivable                       7         13        60
Decrease (increase) in prepaid expenses
 and deposits                                         4          1        43
Decrease in accounts payable                         (5)       (27)      (61)
Increase (decrease) in accrued interest payable       0          0       (45)
Increase (decrease) in other liabilities             29          6      (124)
NET CASH PROVIDED BY (USED IN)
     OPERATING ACTIVITIES                           (56)         1      (497)

CASH FLOWS FROM INVESTING ACTIVITIES:
Short-term investments                             (100)       397         0
Capital expenditures and construction               (51)      (134)     (537)
Deferred expenses                                    21        (21)       43
Net proceeds from sale of rental properties         660          0     1,415
NET CASH PROVIDED BY INVESTING ACTIVITIES           530        242       921

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable                           (45)      (295)      (92)
Net proceeds from refinancing                         0          0       173
Distribution to unit holders                       (556)         0      (520)
NET CASH USED IN FINANCING ACTIVITIES              (601)      (295)     (439)

INCREASE (DECREASE) IN CASH 
 AND CASH EQUIVALENTS                              (127)       (52)      (15)
CASH AND CASH EQUIVALENTS 
 AT BEGINNING OF YEAR                               212        264       279  
CASH AND CASH EQUIVALENTS AT END OF YEAR         $   85     $  212    $  264

The accompanying notes are an integral part of the consolidated financial 
statements.

</TABLE>
<PAGE>

LDP-III

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per unit amounts)

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization - LDP-III (the "Partnership") is a limited partnership 
organized under the laws of the state of California for the purpose 
of acquiring, operating, holding for investment, and ultimately 
selling income producing real estate.  Landsing Partners-III (the 
"General Partner") is a California General Partnership whose 
partners are Landsing Equities Corporation and Partners '84.  
LDP-III was formed on August 30, 1983, and shall continue until 
December 31, 2033, unless sooner terminated.  The Partnership 
commenced operations on December 9, 1983, with the acquisition 
of the first property.

The Partnership owns two buildings.  One is an office building 
Located in northern California which is leased solely to one
Corporate tenant.  The other is located in Idaho and is a commercial
Office building.

Investment in Subsidiary - On December 3, 1992 the Partnership 
transferred two of its properties, the 533 Cabot Building and the 
391 Forbes Building to its wholly owned subsidiary, LDP-III 
Realty Service Corporation, which filed bankruptcy under Chapter 
11 of the Federal Bankruptcy Code.  During 1993, the U.S. 
Bankruptcy case was dismissed and the 533 Cabot Building was 
disposed of.  In 1996, 391 Forbes Building was sold and the 
subsidiary dissolved.  For financial reporting purposes the 
Partnership consolidated the operation of the subsidiary with that 
of the Partnership.  All significant intercompany transactions and 
balances have been eliminated.

Rental Properties - Rental properties are stated at the lower of cost 
or recoverable value.  Depreciation is computed by the straight-
line method over estimated useful lives ranging from five to forty 
years.  Certain acquisition fees and expenses for real estate 
brokerage services paid to Landsing Property Corporation, an 
affiliate of the General Partner, are capitalized as a cost of rental 
properties.  Tenant improvements are amortized over the lives of 
the related tenant leases which range from one to ten years.  
Major additions are capitalized at cost, while maintenance and 
repairs which do not improve or extend the life of the respective 
assets are expensed currently.  When assets are retired or 
otherwise disposed of, the costs and related accumulated 
depreciation are removed from the accounts, and any gain or loss 
on disposal is included in the results of operations.

Loan Costs and Leasing Commissions - Amounts paid to obtain 
loans are deferred and amortized over the lives of the related 
notes payable, which range from four to ten years.  Leasing 
commissions are amortized over the lives of the tenant leases 
which range from one to ten years.

Cash and Cash Equivalents - The Partnership considers all highly 
liquid investments with a maturity of three months or less from 
the date of purchase to be cash equivalents.  

Short-Term Investments - The Partnership invests in short-term 
federally insured certificates of deposits which mature on a date 
in excess of three months from the date of purchase.  The cost 
of these investments approximates market value.

Income Taxes - No provision for Federal or state income taxes 
has been made in the financial statements because these taxes are 
the obligation of the partners.

Net Loss Per Partnership Unit - Net loss per Partnership unit is 
based on weighted average units outstanding after giving effect to 
net income (loss) allocated to the General Partner of $0 in 1996, 
$0 in 1995 and $0 in 1994. 

Concentrations of Credit Risk - The Partnership's financial 
instruments that are exposed to concentrations of credit risk 
consist primarily of its cash and cash equivalents.  The 
Partnership's cash and cash equivalents are in high-quality 
institutions with high credit ratings. This investment policy limits 
the Partnership's exposure to concentrations of credit risks.  

Use of Estimates - The preparation of financial statements in 
conformity with generally accepted accounting principles requires 
management to make estimates and assumptions that affect 
certain reported amounts and disclosures.  Accordingly, actual 
results could differ from those estimates.

Adequate Capital Resources - The General Partner believes that 
despite the fact the Partnership has continued to operate at a net 
loss before gain from the sale of properties and extraordinary items, 
the Partnership has adequate capital resources to continue operations.  
Improvements in the operation at Jefferson Place in Idaho, one of the 
remaining properties, has the property operating at a positive 
cash flow position.  The California property, 1201 Cadillac, also operates
in a positive cash flow position, and a recent re-negotiation of the
lease at that complex will significantly increase operating cash flow.

The Partnership has continued to incur substantial operating losses.
A combination of historic high building activity and recessionary
Economic activity caused severe market pressures on rental rates,
Occupancy levels and agricultural prices.  As a result of these conditions, 
the Partnership has been unable to generate sufficient cash from operations 
to fully fund its operating, necessary capital improvements and debt service 
requirements, resulting in depletion of the Partnership's cash reserves.  
These conditions may indicate that the Partnership will be unable to 
continue as a going concern and realize its property values in the normal 
course of business.  The financial statements do not include any adjustments
relating to the recoverability and classification of recorded asset amounts
or the amounts and classification of liabilities that might be necessary
should the Partnership be unable to continue as a going concern.

The General Partner believes that due to the disposition of certain 
properties and improvement in the remaining properties in the portfolio, 
that operations will stabilize.  Net loss before gains from sales and 
extraordinary items decreased to $193 in 1996 compared to $334 in 1995.  
The Partnership expects this positive trend to continue.

In the event the Partnership must liquidate its assets, management
believes the costs of the assets will be recovered and excess funds 
would be available then for satisfaction of all liabilities.

Limited Partner Units Outstanding - Limited Partner Units outstanding
as of December 31, 1996, 1995 and 1994 were:  37,136, 37,136 and
37,141 respectively.

Restricted Cash - At December 31, 1996 and 1995, there was restricted 
cash of $37 and $14, respectively.  The cash relates to an escrow 
agreement for tenant security deposits.

<PAGE>
<TABLE>

2. RELATED PARTY TRANSACTIONS

The Partnership has entered into agreements with The Landsing 
Corporation and one of its affiliates, Pacific Coast Capital.  
Advisory services for investment management, general and 
administrative and property management are provided by Pacific 
Coast Capital under subcontract with The Landsing Corporation.  
The General Partner is an affiliate of The Landsing Corporation.  
The related party transactions delineated in the Partnership 
Agreement with affiliates of the General Partner are as follows:

<CAPTION>

                                                1996       1995       1994
<S>                                          <C>        <C>         <C>
General and Administrative Support           $   132    $   194     $  233

Property Management and Lease Commissions         32         38         58

3. RENTAL PROPERTIES
                                                1996       1995

Rental properties consist of the following:

Land                                         $ 1,384    $ 2,205
Building and improvements                      9,126     10,101
Total                                        $10,510    $12,306

4. REAL ESTATE

During 1994, a first note payable of $2,395, a second note 
payable of $419 and a third note payable of $304, all due to the 
same lender and collateralized by the Jefferson Place Office 
Building, were consolidated into a single note.  This consolidation 
resulted in a gain on debt forgiven of $334.

On July 7, 1994, the Partnership sold the Silverado Apartments 
located in Houston, Texas.  Total consideration received by the 
Partnership was $8,500, which resulted in a gain of $364 and cash 
proceeds of $1,234.

On October 14, 1994, the Partnership sold the Montbello Green 
Commercial Building located in Denver, Colorado.  Total 
consideration received by the Partnership was $260, which 
resulted in a gain of $37 and cash proceeds of $229.

On August 16, 1996, the Partnership's wholly owned subsidiary, 
LDP-III Realty Services Corporation, sold its remaining property 
391 Forbes.  The sale resulted in a gain for financial reporting 
purposes of $223, and cash proceeds of $660.  

</TABLE>
<PAGE>
<TABLE>

5. NOTES PAYABLE

Notes Payable at December 31, 1996 and 1995, consisted of 
(thousands of dollars):
<CAPTION>
                                                         1996        1995
<S>                                                   <C>         <C>
First note payable collateralized by the 
  Jefferson Place Building bears interest at 
  a rate of 9.25% and requires payments of$23 per 
  month.  This note matures August 8, 2001.           $ 2,483     $ 2,529

Note payable collateralized by the 391 Forbes
  Building bears interest at a rate of 11.25% and 
  requires principal and interest payments of$10 per
  month.  This note matured on March 1, 1996.               0        934
  (See Note 10)

First note payable collateralized by the 1201 
  Cadillac Building bears interest at a rate of 8.5% 
  and requires interest payments of $31 per  month.  
  This note matures on September 1, 1999.              4,408      4,408

Total                                                $ 6,891    $ 7,871

</TABLE>

During 1994, the General Partner re-negotiated the terms and 
conditions of the first mortgage loan on the Jefferson Place Office 
Building.  In return for a principal paydown of $50 the existing loan 
was reduced by $334 to an outstanding balance of $2,814.  This new 
loan accrues interest at the rate of 9.25% per annum, and requires 
monthly principal and interest payments of $23.  Loan is all due 
and payable on August 8, 2001.  This reduction in the outstanding 
principal balance in excess of the principal payments made 
resulted in income to the partnership from forgiveness of debt of 
$334 in 1994.  During 1995, the Partnership made an additional principal 
paydown on this loan of $243.

The loans on the 1201 Cadillac building have a principal balance 
of $4,408, accrue interest at the rate of 8.5% per annum, 
and require interest only payments.  The entire outstanding balance 
of the loan is all due and payable on September 1, 2001.

Rental properties are pledged as collateral for notes payable 
which mature over periods ending through 2001.  Principal 
payments required in future years are as follows:

                          1997        $   50
                          1998            55
                          1999         4,468
                          2000            66
                          2001         2,252
                          Total       $6,891

6. RENTAL PROPERTIES UNDER OPERATING LEASES

Minimum future rents from rental properties under operating 
leases having initial or remaining noncancelable lease terms in 
excess of one year at December 31, 1996, are as follows:

                          1997       $  996
                          1998        1,166
                          1999        1,127
                          2000        1,038
                          2001          984
                          Total      $5,311

During February 1997, the Partnership extended the lease of the sole tenant at
1201 Cadillac for 5 years at an increased rental rate.  The increase is 
included in the schedule above.  

<PAGE>
<TABLE>

7. RECONCILIATION TO INCOME TAX BASIS OF ACCOUNTING

The differences at December 31, 1996, 1995 and 1994, between 
the basis of accounting used in the accompanying financial 
statements and the income tax basis used to file the Partnership's 
Federal income tax return are as follows (in thousands except per unit
amounts):
<CAPTION>

                                                     1996      1995      1994
<S>                                               <C>       <C>       <C>
Net loss                                          $ (193)   $ (334)   $ (259)
Loss on liquidation eliminated for
    financial statement purposes                    (147)
(Increase) decrease resulted from:
  Basis difference and accelerated depreciation     (233)     (182)    (300) 
Capitalize for tax purposes-special tax assessment    23        23
Basis difference and accelerated depreciation on 
  property sold                                                       2,242
Investment - LDP-III Realty Service Corporation     (226)       12       35
Other                                                 35                 36
Net income(loss) - tax basis                      $ (741)   $ (481) $ 1,754

Taxable income (loss) per Partnership unit        $  (20)   $  (13) $    47

Partners' equity                                  $  (70)   $  679  $ 1,013
Increase (decrease) resulted from:
  Basis of assets                                  1,504     1,481    1,457  
  Accumulated depreciation                        (2,756)   (2,523)  (2,336)
  Syndication costs                                4,615     4,615    4,615
  Other                                               35         4
  Remove consolidated equity in LDP-III 
     Realty Services Corp.                                    (344)    (390)
  Tax investment in LDP-III Realty Service Corp.               717      750

PARTNERS' EQUITY - TAX BASIS                     $3,332    $ 4,629   $5,109

</TABLE>
<PAGE>

8. SUPPLEMENTAL DISCLOSURE ABOUT NON-CASH 
   INVESTING AND FINANCING ACTIVITIES

In 1996, proceeds from the sale of building were used to retire debt in the 
amount of $935.  A note payable to a bank with a principal balance of $932 was 
refinanced.  The new loan balance was initially $950; the increase in principal 
of $18 was used for deferred loan fees and other closing costs.

During 1994, notes payable of $334 were forgiven.

9. SUPPLEMENTAL CASH FLOW INFORMATION

The Partnership paid interest of $671 in 1996, $717 in 1995, and $1,302 
in 1994.  

<PAGE>
<TABLE>

SCHEDULE X

LDP-III

SUPPLEMENTARY CONSOLIDATED INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(In thousands)
<CAPTION>
          COLUMN A                                      COLUMN B
            ITEM                              CHARGED TO COSTS AND EXPENSES    
                                                  1996    1995    1994
<S>                                              <C>     <C>     <C>
1.  Maintenance and repairs                      $ 122   $ 109   $ 218 

2a. Depreciation                                   286     342     510 

2b. Amortization of deferred loan costs and
    leasing commissions                             39      54      78 

3.  Property taxes                                 163     130     254 

4.  Utilities                                       72      63  

5.  Insurance                                       34      29  

As to items omitted, amounts did not exceed one percent of total revenue.

</TABLE>
<PAGE>
<TABLE>

SCHEDULE XI
LDP-III

REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
(In thousands)
<CAPTION>
                                                         COST
                                                         CAPITALIZED
                                    INITIAL COST         SUBSE-    PROVISION
                                       BLDG. &           QUENT TO  FOR               ACCUMULATED
                    ENCUM-             IMPROVE-          ACQUI-    LOSS IN           DEPRECI-
                    BRANCES    LAND    MENTS    TOTAL    SITION    VALUE    TOTAL    ATION

<S>                 <C>       <C>      <C>      <C>      <C>      <C>       <C>      <C>
Jefferson Place     $2,483    $  243   $5,150   $ 5,393  $1,126   $  (640)  $ 5,879  $2,633 
 Boise, Idaho
 Date Acquired 12/09/83

1201 Cadillac Court  4,408     1,450    3,773     5,223     408    (1,000)    4,631   1,453
 Milpitas, California
 Date Acquired 10/32/85

TOTAL               $6,891    $1,693   $8,923   $10,616  $1,534   $(1,640)  $10,510  $4,086

</TABLE>

NOTES:

(1)  The Partnership's policy is to purchase development and completed 
     projects.  Costs incurred before completion of the development are 
     included in building basis.  Costs incurred after completion of the 
     development projects and costs incurred subsequent to the purchase of 
     completed projects are included as improvements.

(2)  Depreciation is computed by the straight-line method on lives ranging
     from five to forty years.

<PAGE>

EXHIBIT INDEX

Exhibit Number in
Accordance with
   601 of
Regulation S-K                        Exhibit Description

3 & 4                  The Partnership Agreement included as Exhibit B to 
                       the Prospectus dated March 1, 1984 (Incorporated by 
                       reference to Exhibit 3.4 of Form 10-K for the year 
                       ended December 31, 1985)

10.1                   Commercial Contract to Buy and Sell Real Estate 
                       dated December 11, 1989 between Highland Hall 
                       and Landsing Diversified Properties-III

10.2                   Bill of Sale and General Warranty Deed related to 
                       the sale of Silverado Apartments. (Incorporated by 
                       reference to Exhibit 10.1 and 10.2 of Form 8-K 
                       dated July 7, 1994)

99                     ADDITIONAL EXHIBITS

99.1                   The Prospectus dated March 1, 1984 (Incorporated 
                       by reference to Exhibit 28.1 of Form 10-K for the 
                       year ended December 31, 1985)

99.2                   Supplement No. 12 to Prospectus (Incorporated by 
                       reference to Exhibit 28.2 of Form 10-K for the year 
                       ended December 31, 1985)